By Bill Finley
Pennsylvania Governor Tom Wolf submitted his 2020-2021 budget Tuesday, which called for a massive cut in the amount of money that goes to horse racing from slots proceeds. Wolf is seeking to take $204 million away from the Race Horse Development Fund, which totals about $250 million.
Such a move would prove devastating to racing and breeding industries, as slot money accounts for 88% of the total purses.
“This scheme would destroy an industry that provides a $1.6-billion economic impact and supports an estimated 16,000 to 23,000 jobs in the agriculture, manufacturing, construction, retail and hospitality industries here in Pennsylvania,” said Pete Peterson, Executive Director of the Pennsylvania Equine Coalition, an organization representing the six Thoroughbred and Standardbred horsemen and breeder associations in the state.
When addressing the General Assembly Tuesday, Wolf laid out a plan to create a $200-million fund that would provide college scholarships for Pennsylvania residents at Pennsylvania state schools under a program called the Nellie Bly Tuition program. He proposed that the program be paid for by taking money out of the Race Horse Development Fund.
“We will use existing tax dollars that are right now flowing into the Horse Racing Development Fund,” he said. “Let's bet on our kids, instead of bankrolling racehorse owners, to ensure the viability of Pennsylvania's state system of higher education.”
The Pennsylvania Equine Coalition issued a press release shortly before Wolf's address that quoted numerous individuals involved in the Thoroughbred and Standardbred industries, all of them coming out strongly against Wolf's proposal.
“I cannot believe that our Governor would turn his back on the horse breeding and racing industry,” said Pat Chapman, who owned Smarty Jones. “This would be absolutely devastating to so many of us in the horse business. I brought Smarty Jones back to Pennsylvania for breeding because of what we were told four years ago and I thought I could trust what we were told. If the governor goes through with this proposal, the end is near for my breeding and racing days in the state of Pennsylvania and the end for many others. This is a very devastating possibility.”
“I strongly oppose the governor taking any of the money from the Race Horse Development Trust Fund, which funds purses and breeder incentives,” said trainer Mark Reid. “It will be the end of horse breeding and racing in Pennsylvania. The industry in Pennsylvania will never recover from this.”
This is not the first time that a Pennsylvania governor has gone after racing's slot money. In 2012, then governor Tom Corbett took $72 million from the fund, spread out over three years. But the racing industry thought that it had guarantees in place that would prevent any future attempts at diverting money out of the fund. In 2017, the legislature passed legislation that converted the fund into a trust called the Race Horse Development Trust Fund (RHDTF), which industry leaders believed could not be touched by the government.
“I don't know that he's necessarily taken a hard look at all the legal ramifications for him and the Commonwealth if he is to take the money away from the trust,” Peterson said. “The legislature put the money into a trust fund because of complaints from breeders organizations and others who said they were having had difficulty getting people to bring stallions in and encouraging new investment in Pennsylvania because of the uncertainties. They put it onto a trust fund for that very reason, to deliver certainty. I don't understand how this governor can go in and say the trust fund doesn't mean anything. The 2017 Race Horse Industry Reform Act, which established the trust, noted that the money in the trust are not funds of the Commonwealth and that the Commonwealth shall not be rightfully entitled to any money.”
Peterson predicted that legal action would be taken against Wolf and the state based on the guarantees that were supposedly a part of the RHDTF.
When the formation of the trust was announced, Pennsylvania breeders saw an immediate spike in business, a welcome development after the uncertainty about the future of the fund has caused many breeders to choose other states. The number of mares bred in Pennsylvania in 2019 was 686, a 12.5% increase.
“If the governor takes money from Pennsylvania horsemen, it would decimate the entire agricultural industry in the state,” said Layne Shaffer, the farm manager at Arrowood Farm. “What people don't understand is that the majority of horsemen don't have a ton of money. Most of the money we earn goes to pay the veterinarian, the farrier, the hay farmer, the horse trailer driver and so on. If this happens, I don't know what thousands of families in Pennsylvania will do and what will happen to the horses they love.”
The budget cannot go into effect until after it is approved by both houses of the Pennsylvania legislature. That will give the industry's lobbyists time to state their case regarding the RHDTF. Another possibility is that pressure from the industry and racing-friendly politicians could persuade Wolf to seek less than the $204 million.
Not a subscriber? Click here to sign up for the daily PDF or alerts.
